Bye bye BMI

I have always been a huge fan of British Midland. Yet, sadly, they are yet another example of “A great airline but a lousy business”.

Donington Hall, the headquarters of BMI (Photo credit: Wikipedia)

British Midland Airways were born the year I was: 1964. They operated out of Manchester. In 2001 they became BMIBritish Midland and then just BMI in 2003. Ownership of the airline has always been vexed. SAS, BMI Chairman Michael Bishop and Lufthansa have all had involvements. Lufthansa has been full owner since November, 2009 and has lost a chunk of money on BMI (eg 285m euros of losses and disposal fees in 2011). In January, auditors expressed grave concerns that BMI had any future. Now sold to IAG (British Airways /Iberia) with a condition that BMI subsidiaries BMI Baby and BMI Regional be sold separately. On 30 March 2012, the sale of BMI was approved, and the deal was completed 19 April with ownership transferring to IAG.BMI has left Star Alliance but membership benefits for frequent flyers on Star Alliance will continue until 31st May 2012. Cash those miles in folks! In the meantime, its good bye to an airline who I found to be consistently great in customer service and who used to be an innovator. Skytrax gave them a 3 star rating. I thought they were closer to 4 star -maybe I was lucky!

bmibaby Boeing 737-300 (G-BYZJ) at Cardiff (Rhoose) Airport, Cardiff, Wales. Taken by Adrian Pingstone in September 2004 and released to the public domain. (Photo credit: Wikipedia)

BMI set up BMI Baby in 2002. I always really enjoyed flying them although I feel they never quite lived up to their potential. No one seemed quite focused on making BMI Baby ever work properly for both passengers and company. (My rating of them was an average 3.5 out of 5 or 70%). Bmibaby flew 2.2 million passengers in 2011 at a load factor of just 72.1%. Their fleet utilisation was reportedly 20% less than EasyJet’s. Some of my flights would have been less than a third full which is of course not sustainable. No wonder Lufthansa was losing a fortune. Many BMI Baby flights will cease on Monday 11th June 2012. It looks like most/all (?) of their Belfast and East Midland flights finish on that date. This includes one of my favourite handy ones from Belfast to East Midlands airports. Then all BMI Baby flights will cease from Monday. 10thSeptember 2012. I guess they hope to make some summer cash from holiday destinations. Nice not to have a sudden complete shut down of the airline for passengers. Not sure what will happen to current fleet of 12 737-300s and two 737-500s. Meanwhile Flybe (14% owned by IAG) announced it will start five new routes from East Midlands and add more flights to Scotland-all destinations currently served by bmibaby.

BMI regional are based in Aberdeen, Scotland. (This is the city where my brother and sister were born!). They fly to regional destinations across Europe Their 15 49-seat ERJ-145s and four 37-seat ERJ-135s carried 414,000 passengers in 2001 at a load factor of a mere 62.3%. Who was watching that? Again, no wonder Lufthansa was losing a fortune in BMI. So what are the options for BMI Regional? Closure is also on the cards for them unless a buyer can be found. Bmi have said this week: “Progress has been made with a potential buyer for bmi Regional, but so far this has not been possible for bmibaby, despite attempts over many months by both Lufthansa and IAG,”. The mystery is who? Possible candidates:

To my mind, FlyBE seems the most logical candidate. Although I suspect, they will continue to focus on setting up their own routes out of airports vacated by the BMI subsidaries. They already own ERJs but I would assume if they became owner, they would phase out the BMI Regional’s small ERJs

Eastern airlines would come next. They operate out of Aberdeen and their mixed fleet includes a couple of ERJ 135s and 145s.

Ryanair and Easyjet may be interested in cherry picking some routes but I suspect would not be willing to buy the whole airline. Cheaper to just start new services with their aircraft, I suspect.

Loganair, the Glasgow based airline who fly under FlyBE colours are a more unlikely candidate but a possibility

I have been racking my brain for other outside candidate. Etihad/Air Berlin?

In the meantime, vale another airline and thoughts go to the 1,200 employees losing jobs at East Midlands Airport, Belfast and Castle Donington. Hopefully FlyBE, and whoever ends up owning bmi regional will pick bmi staff up.

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[…] Airlines Group (IAG). Handover was completed June 1. (This post is an update of my earlier post: Bye Bye BMI). The sale included all of bmi Regional’s fixed assets and long-term liabilities, including […]

Comments

Flybe has expressed very little interest throughout – preferring to go on the attack at EMA and BHD.

Eastern is a tough pick after swallowing the pain that was Air Southwest – I sadly don’t seem them biting.

The biggest hope is that the unknown called “Granite Aviation” comes to the rescue and it becomes a feeder airline to other airlines. Surprisingly, it was one of the stronger parts of BMI (other than Diamond Club!!!)

BMI Baby… that has been a disaster from start to finish sadly. Wrong equipment, wrong places, eaten from all sides by all other airlines. I’m honestly surprised that it hasn’t lasted that long

And BMI Mainline. Sigh. I’ve written my fair share about this. Looking where the blame is… it’s everywhere BAR the front line staff who are a sterling lot. Be it the madness of setting up routes that experienced insurrections 1 day after the route starts, to the bonkers Leeds to Lille Route, to Revenue Management destroying… well everything in its path. And LH don’t come out rosey in this as they could had applied serious control to the company… but failed to.

In furious agreement especially about the lack of control by Lufthansa. They knew the whole thing was bleeding money…what were they doing? As I said, great airline, lousy business. Do you think Regional will go the way of Baby and be shut down or will Granite be successful? If Granite wins out, then it looks FlyBE will be involved. http://www.bbc.co.uk/news/uk-scotland-scotland-business-17959889